A week ago, Fox changed its licensing rules so that non-paying users of Hulu would be unable to watch new episodes of their shows until eight days after their air date. Put on your analyst hat and think about what effect this might have on, say, piracy of those shows. Did you determine that it would increase piracy? Congratulations, you are a better judge of consequences than Fox. Because piracy of Fox shows went up by a huge amount during this last week.

Actually, it’s likely that Fox anticipated this increase in piracy and simply considered it worth the trade-off. With worse options for free users, more will watch the live broadcast, they suppose, and ad prices go up with these increased projections. Query: if these people could watch it on live TV, why would they be watching it on Hulu in the first place?

For busy and budget-conscious TV-watchers, expensive cable and a DVR aren’t an option. Hulu is. Hulu gets shows out there, allows for targeted, relatively unskippable advertising, and with a reasonable one-day delay, doesn’t add much inconvenience to the bargain for the user. This eight-day delay is punishing, and while “getting something for nothing” is a rather new entitlement we all seem to have, it does feel like a bait-and-switch for millions of viewers.

So what do they do? They google “download ______”, and halfway down the first page is a public, well-seeded torrent that downloads the whole episode — with no ads — in minutes, and allows them to use their favorite media player or take it with them anywhere. Wow! What a great way to watch your favorite shows!

Will Fox backpedal? Not likely. But Hulu is a work in progress, and the cards change hands rapidly in this business. What seems like a good deal to Fox now, improving their broadcast relationships, might turn out to be a ball and chain a year from now as the practicality of cord-cutting grows.

Sometimes companies have to do things that their customers don’t like. Raise rates, for instance. Ugly but inevitable. But making decisions plainly detrimental to your customer experience for mysterious reasons will have repercussions. In this case, they just lost thousands upon thousands of loyal viewers who enjoyed their products, many of whom consider themselves abused and will never return.

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Digital Consigliere

Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.